Fitch Ratings has downgraded the long- and short-term foreign currency Issuer Default Ratings (IDRs) of ProCredit Bank Albania (PCBA) to B from B+ with a negative outlook, the ratings agency said in a statement. Fitch affirmed the bank's viability rating at 'b'. The downgrade reflects Fitch's assessment of heightened transfer and convertibility risks in Albania . "This is because the Long-Term IDRs and Support Rating of PCBA are driven by potential support from its Germany -based parent, ProCredit Holding , which in turn is constrained by Fitch's assessment of transfer and convertibility risks in Albania ", Fitch said. The negative outlook suggests that the balance of risks remains on the downside given Albanian country risks, as a result of weak domestic growth and worsened government finances. ProCredit's viability rating reflects a difficult operating environment and the ensuing pressures on its asset quality, performance and capitalisation, Fitch said. However, liquidity is strong, refinancing risk is limited and the bank's retail funding base is a rating strength. The rating agency expects the bank's asset quality to stabilise in mid-term following efforts to clean up the portfolio of 'medium-sized' loans in 2013.
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